• US lawmaker to seek 'strong' congressional action on EU clearinghouse law
    28 June 2019
    A senior US lawmaker wants Congress to convey bipartisan disapproval of the EU’s new clearinghouse law but is running into resistance from a leading Republican lawmaker and divisions among market participants.

    Democratic Representative David Scott, chairman of a House Agriculture subcommittee, expressed outrage about the law extending EU’s post-Brexit oversight to clearinghouses outside the bloc.

    “This is an insult to the American people,” he said at a hearing Wednesday of his Commodity Exchanges, Energy, and Credit panel. “There will be a very strong and adequate response to this. We’re not going to put and make our financial services industry be turned into second-class citizens on the world financial stage. You can bet on that.”

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  • CFTC's foreign brokers plan draws raves from industry members enraged with EU
    27 June 2019
    Derivatives market participants furious about a new EU clearinghouse rule lauded a US Commodity Futures Trading Commission proposal to codify its authority to halt relief issued to foreign firms.

    “This was adding a tool to the tool chest they’ve had,” Christopher Edmonds, an Intercontinental Exchange senior vice president, told a House Agriculture subcommittee yesterday.

    “That was a very, very strong, positive message,” said Terrence Duffy, head of the CME Group. Under the CFTC plan, he added, termination of relief “would make it very, very difficult for European brokers to deal with US clients.”

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  • JPMorgan's Irish fine sounds alarm for funds relocating from UK
    27 June 2019
    JPMorgan’s fine for outsourcing functions without permission shows the Irish regulator's determination to avoid becoming the home for brass-plate financial companies.

    Any bank or fund's business model that involves carrying out major functions outside Ireland will need at the very least a backup plan. Failing to notify even blameless arrangements or modifications to Irish regulators could cost dear.

    That will be significant for the many UK-based firms looking to shift operations across the Irish Sea to maintain their presence within the EU’s single market while keeping a foothold in the City of London.

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  • Fed should drop liquidity plan for foreign banks' US branches, Japan says
    26 June 2019
    The US Federal Reserve should scrap a draft proposal for extending liquidity rules to foreign banks’ US branches because they already receive sufficient oversight, Japanese authorities said.

    “We have been scrupulous in monitoring Japanese banking groups’ financial conditions and liquidity risk on a global basis,” said the Bank of Japan and Japan’s Financial Services Agency, which oversees the banking, securities and insurance sectors. “Furthermore, US and Japanese authorities have closely cooperated in supervising both US and Japanese banks.”

    The letter last week added that foreign banks use the American dollar globally, not just in the US, so that their liquidity management worldwide could be hindered by the Fed plan.

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  • EU banks’ stability failings highlight limits of global governance
    25 June 2019
    Post-crisis banking reforms have still not been fully implemented, a global financial stability watchdog has warned G20 leaders as they prepare to meet in Osaka this weekend.

    It's not the first time the Financial Stability Board has warned of these gaps. But they persist, notably in the EU, which has been warned for several years that its efforts to shore up lenders are “not materially compliant” with global norms.

    Global regulators hope that shame will encourage laggards to catch up, as European lenders urge to make a further special case in implementing the latest round of bank-capital rules.

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